After
freezing production plans at its upcoming Chennai plant due to economic
slowdown, French carmaker Renault has decided to use its partnership
with Mahindra to roll out Sandero hatchback in India in 2010. The plan
will also help the companies use excess capacity at their Nashik plant.Sandero will be built on the Logan platform and will be the first product for both companies in the high-volume compact car segment. The car will come in both petrol and diesel versions and sources said the engines would fall in line with the small car definition of the government-- petrol engine below 1,200cc and diesel below 1,500cc with overall length below 4 meters-- to avail lower excise duty
An official for Renault refused to confirm the company's Sandero move. Pawan Goenka, head of Mahindra's automotive division, said he was not in a position to make any immediate comment on the matter. "Nothing has been decided as yet. Talks are at a preliminary stage,'' he said.
The Sandero appears to fit perfectly in the scheme of things of both companies in the
current market situation. For Renault, it gives an
opportunity to enter the high potential small car market without any
fresh investment on their part. And for Mahindra, it marks an entry
into the small car market, something the company has so far avoided as
it focused only on the utility vehicle and SUV category. The Sandero makes the task easier for the companies as it shares a number of parts with the Logan, making the sourcing of components cost effective. The car will be distributed from Mahindra's existing network that also sells the Logan. Currently, 140 dealerships sell the Logan and the number is likely to be strengthened by 40 more points by this year-end.
Mahindra and Renault had decided to join forces in February 2005, initially to produce and commercialize the Logan in India. They formed a 51:49 partnership and lined up an investment of about Rs 700 crores for the Nashik production facility.
Renault has said it will re-start its independent product plans from Chennai when it gets better visibility about the overall financial situation.
Source :- The Times Of India, Mumbai
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